Information for the month of May concerning Department A, the first stage of the production cycle, is as follows

Information for the month of May concerning Department A, the first stage of the production cycle, is as follows:

                                                                Materials                Conversion Costs

Beginning work in process                          $ 7,200                    $  6,000

Current costs                                            $27,800                    $16,050

Material costs                                            $35,000                    $22,050

Equivalent units based on average cost method                                                          SOLUTION

                                                                10,000                       9,800

Goods completed                        9,000 units

Ending work in process                        1,000

Material costs are added at the beginning of the process.  The ending work in process is 80 percent complete as to conversion costs.  How would the total costs accounted for be distributed using the average cost method?
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"C" Company has fixed costs of $689,698. Selling price per unit is $156 and variable cost per unit is $22.

"C" Company has fixed costs of $689,698. Selling price per unit is $156 and variable cost per unit is $22.

a.) How many units must "C" company sell in order to break even?

b.) How many units must "C" company sell in order to earn a profit of $302,036?

c.) a new employee suggest that "C" company sponsor a softball team as a form of advertising. The cost to sponsor the team is $2,412. How many more units must be sold to cover this cost?
                                                         CLICK HERE FOR SOLUTION

"R" Company requires four units of R2 for every unit of D2 that it produces. Currently R2 is made by "R" Company

"R" Company requires four units of R2 for every unit of D2 that it produces. Currently R2 is made by "R" Company, with the following per unit costs in a period when 20,000 units were produced:

                   Direct materials              $6.00

                   Direct labor                     2.50

                   Manufacturing overhead   5.60

                     Total                            14.10

Variable manufacturing overhead is applied at 100% of direct labor cost. The rest of the overhead is fixed. "R" Company will need 20,000 units of R2 for next year's production.

Now, "S" Corporation has offered to supply 20,000 units of $2 at a price of $13.00 per unit. If "R" company accepts the offer, all of the variable costs and $30,000 of the fixed costs will be eliminated.

QUESTION:  Should "R" Company accept the offer from "S" Corporation?

                                                       CLICK HERE FOR SOLUTION

"X" Company started in production operations on July 1. During July, the silk-screening department completed 15,600 units.

"X" Company started in production operations on July 1. During July, the silk-screening department completed 15,600 units. There were 2,400 units in ending inventory which were 75% complete with respect to materials and 20% complete with respect to conversion costs. During July, the department accumulated materials costs of $40,890 and conversion costs of $69,948.

Calculate the cost of the goods transferred out.

What is the value of the ending inventory?

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Atlanta Corporations balance sheet at March 30, 20X4,

Atlanta Corporation’s balance sheet at March 30, 20X4, contained only the following items (arranged here in random order)                                                                                                   

Cash                                        $10,000

Notes Payable                          10,000

Merchandise inventory                        40,000

Paid-in capital                          80,000

Land                                        14,000

Accounts Payable                    $8000

Furniture and fixture                3000

Long-term debt payable           12,000

Building                                   28,000

Machinery and equipment       15,000

On March 31, 20x4, these transactions and events took place:

1. Purchased merchandise on account, $4,000

2. Sold cost for $1,000 cash some furniture that was not needed

3. Issued additional capital stock for machinery and equipment valued at $12,000

4. Purchased land for $25,000 of which $5,000 was paid in cash, the remaining being represented by a 5-year note (Long –term debt)

5. The building was valued by professional appraiser at $47,000

Prepare in good form a balance sheet for March 31, 20X4, showing supporting computations for all new amounts.

TUTORIAL PREVIEW

Atlanta Corporation
Balance sheet March 31, 2004
Assets:
Current Assets:
Cash (10,000 + 1,000 - 5,000)	6,000
Merchandise Inventory (40,000 + 4,000)	44,000

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E 9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000

E 9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $28,000.

Financial Accounting: Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

ACC 363 E 9-2 The ledger of Elburn Company

Axia College of University of Phoenix (UoP)                                                                   SOLUTION

E 9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $28,000.

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The financial statement columns of the work sheet for Acme Company at December 31, 2007, are as follows

The financial statement columns of the work sheet for Acme Company at December 31, 2007, are as follows:

                                                                             Acme  Company
                                                                               Work  Sheet                                                                  
                                                              For the year ended December 31, 2007                    SOLUTION

                                                          Income Statement                    Balance  Sheet
                                                   ------------------------------                 -------------------------

       Accounts                                                             Debit              Credit                  Debit              Credit
     -------------------                                                ----------           -----------          -------------         ------------    
     Cash                                                                                                                   $14000
     Accounts  Receivable                                                                                             11000
     Supplies                                                                                                                  4000
     Prepaid  Insurance                                                                                                   6000
     Video  Equipment                                                                                                 210000
     Accumulated  Depreciation--
         Video  Equipment                                                                                                                     26000
     Accounts  Payable                                                                                                                       24000
     Note  Payable                                                                                                                              60000
     Salaries  Payable                                                                                                                           3000
     Common  Stock                                                                                                                           90000
     Retained  Earnings                                                                                                                       22000
     Dividends                                                                                                              15000
     Video  Rental  Revenue                                                                138000
     Advertising  Expense                                               21000
     Depreciation  Expense                                             12000
     Insurance  Expense                                                   3000        
     Rent  Expense                                                        17000  
     Salaries  Expense                                                   44000
     Supplies  Expense                                                    6000  
                                                                                 -------------         -------------            --------------          ------------
              Totals                                                          103000            138000               260000             225000
     Net  Income                                                            35000                                                               35000
                                                                                --------------         --------------           --------------          --------------
                                                                                 138000            138000               260000             260000    

     Instructions:                                                                                                                   SOLUTION
(a)  Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2007. 

(b)  Prepare a classified balance sheet for Acme Company at December 31, 2007 assuming the note payable is a long-term liability.    

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23-5a. Safety-Bright Company recently began production of a new product, the halogen light, which required the investment of 1,000,000 in assets

23-5a. Safety-Bright Company recently began production of a new product, the halogen light, which required the investment of 1,000,000 in assets. The costs of producing and selling 20,000 halogen lights are estimated as follows:

Variable costs per unit:

Direct materials:                                   28

Direct labor:                                         12

Factory overhead:                                5

Selling and adminitrative expenses:     5

Total:                                                   50                                                                              SOLUTION

Fixed costs:

Factory Overhead:                               200,000

Selling and administrative expenses:    80,000

Safety-Bright Company is currently considering establishing a selling price for the halogen light. The president of safety-bright company has decided to use the cost-plus approach to product pricing and has indicated that the halogen light must earn a 15% rate of return on invested assets

Instructions:
a. determine the amount of desired profit from the production and sale of halogen lights

b. assuming that the total cost concept is used, determine the cost amount per unit the markup percentage and the selling price of the halogen light

C.assuming that the product cost concept is used, determine the cost amount per unit the markup percentage and the selling price of the halogen light

d. assuming that the variable cost concept is used, determine the cost amount per unit the markup percentage and the selling price of the halogen light

e. assume that as of June 1, 2006 7,000 units of halogen light have been produced and sold during the current year. Analysis of the domestic market indicates that 10,000 additional units of the halogen light are expected to be sold during the remainder of the year at the normal price determined under the 

Prepare a differential analysis report and the proposed sale to lights Co and based on the report should the proposal be accepted ?

CLICK HERE FOR SOLUTIONtotal cost concept. On June 5, Safety Bright company received an offer from Lights Co. for 2,000 units of the halogen light at 49$ each. Lights Co will market the units in Japan under it's own brand name, and no additional selling and administrative expenses associated with the same will be incurred by Safety Bright Co. The additional business is not expected to affect the domestic sales of the halogen light, and the additional units could be produced using existing capacity.

Prepare an analysis of The Rondo Company's New Project

Prepare an analysis of The Rondo Company's New Project

The Rondo Company's New Project

Use ONLY these assumptions for your analysis:                                                               

1. Project life is 5 years.

2. Initial investment is $6,250,000 for equipment invoice, transportation, and installation.

3. Worker training for operating new equipment is $15,000.

4. First year sales are projected to be $7,500,000 escalated at 3% each year thereafter.

5. Operating overhead (excluding depreciation) is estimated at 27% of annual sales.

6. Administrative overhead is estimated at 35% of annual sales.

7. Depreciation is straight line, 7 years.

8. The tax rate is 40%.

9. The new equipment can be salvaged at the end of the project (end of YR 5) for $1,500,000. 10. Use

Rondo's WACC of 10% to discount the project cash flows.

Create an Excel cash flow spreadsheet and calculate the NPV and IRR. Make recommendation on the

                                                        

project. (Hint: You are only interested in the incremental cash flows.) Create a spreadsheet from the above assumptions since they represent the incremental cash flows. Also, list your assumptions and build the spreadsheet by incorporating the assumption value cells into the spreadsheet. The spreadsheet should automatically flow if an assumption value is changed.

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Sandy Alomar Corp., Prepare two schedules for inventory costs under LIFO and FIFO

Sandy Alomar Corp., Prepare two schedules for inventory costs under LIFO and FIFO

You are vice-president of finance of Sandy Alomar Corp., a retail company that prepared 2 different schedules of gross margin for the first quarter ended March 31, 2007. These schedules appear below:

                    Sales ($5 per unit)    cost of goods sold   gross margin

Schedule 1           $150,000                  124,900            25,100

Schedule 2            150,000                  129,400            20,600

The computation of cost of goods sold in each schedule is based on the following data.

                                    Units                Cost per unit                Total cost

Beg. Inventory, Jan 1   10,000             $4.00                           $40,000
Purchase, Jan 10          8,000               4.20                             33,600
Purchase, Jan 30          6,000               4.25                             25,500
Purchase, Feb 11         9,000               4.30                             38,700
Purchase, March 17     11,000             4.40                             48,400

Jane Torville, the president of the corporation, can't understand how 2 different gross margins can be computed from the same set of data. As the V.P. of Finance you have explained to Ms. Torville that the 2 schedules are based on different assumptions concerning the flow of inventory costs, i.e., FIFO and LIFO. Schedules 1 & 2 were not necessarily prepared in this sequence of cost flow assumptions.

Instructions:
Prepare two separate schedules computing cost of goods sold and supporting schedules showing the composition of the ending inventory under both cost flow assumptions.

SOLUTION PREVIEW

Part 1
Calculate cost of goods available for sale and units available for sale
Beginning inventory	10,000 units @ $4	$40,000
Jan. 10	8,000 units @ $4.20	33,600
Jan. 30	6,000 units @ $4.25	25,500

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